GANPATI MOTORS Vs. STATE OF CHHATTISGARH

JUDGEMENT

(1.) The stand taken by the Revenue with regard to 'initiation' of proceedings against the assessee, finding that the order passed by the Competent Authority in favour of the assessee, dropping the penalty proceedings is detrimental to the interest of revenue, as upheld by the learned Single Judge, is under challenge in this appeal preferred by the assessee.

(2.) We have heard learned counsel appearing for the appellant as well learned counsel for the State.

(3.) The sequence of events reveals that assessment for the year 2009-10 was finalized by the assessing officer on 23.1.2013. Penalty proceedings were also proposed against the assessee, but the officer himself dropped the said proceedings as per order dated 29.7.2013. In the course of further proceedings, the Commissioner noted that course pursued by the officer deciding to drop the penalty proceedings was quite prejudicial to the rights and interest of the revenue and under such circumstances, it was decided to invoke the power under section 49 (3) of the Chhattisgarh Value Added Tax Act, 2005 ("in short " the Act of 2005") and accordingly, the record was called for and the matter was examined further. A show-cause notice was issued to the assessee on 26.12.2016, which is stated as served to the assessee, by hand, on 23.1.2017. The assessee sought to challenge it by filing a writ petition, mainly contending that, owing to the mandate of Section 49 (3) of the Act of 2005, the proceedings had to be 'initiated', if at all the course pursued by the officer concerned was prejudicial to the revenue, within a maximum period of 'three years'. As per the statute, it is three 'calender years' and as such, the time expired on 31.12.2016 according to the learned counsel. In fact, the notice was served only on 23.1.2017 and hence the proceedings were clearly barred by limitation, which accordingly was put to challenge.